Bill Text: NY A10837 | 2019-2020 | General Assembly | Introduced

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Bill Title: Relates to requiring business interruption insurance to cover disease outbreaks as denying such coverage based on a disease outbreak is against public policy.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Introduced - Dead) 2020-07-20 - referred to insurance [A10837 Detail]

Download: New_York-2019-A10837-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          10837

                   IN ASSEMBLY

                                      July 20, 2020
                                       ___________

        Introduced  by COMMITTEE ON RULES -- (at request of M. of A. Carroll) --
          read once and referred to the Committee on Insurance

        AN ACT to amend the insurance law, in  relation  to  requiring  business
          interruption insurance to cover disease outbreaks

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1.  The insurance law is amended by adding a new  section  346
     2  to read as follows:
     3    §  346. Business interruption insurance; disease outbreak. (a) For the
     4  purposes of this section:
     5    (1) "business" shall mean a business registered with the department of
     6  tax and finance or not-for-profit corporation registered with the attor-
     7  ney general's charities bureau.
     8    (2) "eligible employee" shall mean a full-time employee  who  works  a
     9  normal work week of twenty-five or more hours.
    10    (3)  "income"  shall  mean traditional business income as well as not-
    11  for-profit revenue from donations, sponsorships, and grants.
    12    (4) "net written premiums received" shall mean gross  direct  premiums
    13  written,  less return premiums thereon and dividends credited or paid to
    14  policyholders, as reported on the company's annual financial statement.
    15    (5) "premium taxes" shall mean payments required under subsection  (d)
    16  of section two thousand one hundred eighteen of this chapter.
    17    (b)  (1)  Notwithstanding any provisions of law, rule or regulation to
    18  the contrary, every clause or provision of a policy of insurance  insur-
    19  ing  against  loss  or  damage  to  property, which includes, but is not
    20  limited to, the loss of use and occupancy and business interruption  and
    21  contingent  business  interruption,  which  allows  the  insurer to deny
    22  coverage based on a virus, bacterium, or other microorganism that causes
    23  disease, illness, or physical distress or that  is  capable  of  causing
    24  disease, illness, or physical distress shall be null and void as against
    25  public  policy;  provided, however, the remaining clauses and provisions
    26  of the contract shall remain in effect for the duration of the  contract
    27  term.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16896-03-0
        A. 10837                            2

     1    (2)  The  coverage  required  by  this  subsection shall indemnify the
     2  insured, subject to the limits under the policy, for any loss  of  busi-
     3  ness or business interruption and contingent business interruption.
     4    (3)  This  subsection  shall apply to policies issued to insureds with
     5  less than two hundred fifty eligible employees.
     6    (c)(1) An insurer, including excess lines insurers, which  indemnifies
     7  an  insured  who  has  filed  a claim pursuant to subsection (b) of this
     8  section may apply to the superintendent for relief and reimbursement  by
     9  the  department from funds collected and made available for this purpose
    10  as provided in subsection (d) of this section.
    11    (2) The superintendent shall establish procedures for  the  submission
    12  and   qualification  of  claims  by  insurers  which  are  eligible  for
    13  reimbursement pursuant to this section. The superintendent shall  incor-
    14  porate  in  these  procedures such standards as are necessary to protect
    15  against the submission of fraudulent claims by insureds, and appropriate
    16  safeguards for insurers to employ in the  review  and  payment  of  such
    17  claims.
    18    (d)(1)  The  superintendent  is  authorized to impose upon, distribute
    19  among, and collect from the companies, including excess lines  insurers,
    20  engaged in business pursuant to this chapter, such additional amounts as
    21  may  be  necessary  to  recover the amounts paid to insurers pursuant to
    22  subsection (c) of this section.
    23    (2) The additional special purpose apportionment  authorized  pursuant
    24  to  paragraph one of this subsection shall be distributed in the propor-
    25  tion that the net written premiums, or premium  taxes  in  the  case  of
    26  excess  lines  insurers,  received by each company subject to the appor-
    27  tionment authorized by this section for insurance written or renewed  on
    28  risks  in  this  state  during  the calendar year immediately preceding,
    29  bears to the sum total of all such  net  written  premiums,  or  premium
    30  taxes  in  the  case of excess lines insurers, received by all companies
    31  writing that insurance or coverage within the state during that calendar
    32  year, as reported.
    33    § 2. This act shall take effect immediately and  shall  apply  to  all
    34  business interruption insurance claims filed by an insured and all poli-
    35  cies  or  contracts issued, renewed, modified, altered or amended on and
    36  after such effective date.